We do all rather need to start worrying when it’s The Guardian, near uniquely among the legacy media, which manages to get this story about the Goldman Sachs pay cuts right. For of course Goldman hasn’t cut the pay of employees in the slightest. Hard headed business types tend not to do that as they’re entirely aware of Keynes’ point, we humans really hate having our nominal pay cut.
You know, one of the major reasons why recessions even exist, why wouldn’t Goldman Sachs know about that. Sadly though most papers have been getting this wrong:
Goldman Sachs CEO David Solomon slashes pay for his employees as revenue drops
No, he hasn’t.
Goldman Sachs is slashing pay as it pursues an automation agenda
Nope, not doing that either.
Goldman Sachs cuts pay by 20% as profits fall on poor trade
Goldman Sachs cuts bankers’ bonus pot by 20% as profits fall
Firm announces $798m reduction in amount set aside for benefits and salaries
Yes, that is what they’ve done.
To clarify, everyone gets paid what they’re paid as Goldman Sachs. But for all except the most basic staff the majority of income comes as the bonus. And every quarter the bank decides how much is going to be put into the bonus pot. This is a hard limit. Then there’s that almighty catfight once a year as people argue over who should get how much out of that bonus pot.
All Solomon has done is tell everyone how much of the first quarter’s revenues went into that bonus pot. The only remarkable thing about this story being that it was The Guardian that got it right. Which is actually sorta worrying.